SCOREBOARD: Stubborn bears

Given the run of positive data and news, I'm surprised by the market's comparatively muted reaction; in fact it was risk off more than anything. For starters, Greece got its €34 billion, as we found out during our trading session yesterday, and creditors have agreed to cut Greece's debt to GDP to 124 per cent by 2020 (through measures such as lowering interest rates, bond buybacks etc).

The only hiccup in all of this was the IMF's decision to delay its part of the payment until the Greek debt buyback (Greeks use monies at cheaper rates from bailout mechanisms to buyback bonds, thus lowering their debt burden) was complete. The IMF suggested the delay wasn't such a big deal and they had delayed in the past, which for them is quite something – it's bear cave that place for sure.

Me, I would have thought that was all good news as it doesn't look like we'll be getting that Grexit everyone was so excited about, but euro actually dropped about 50 pips overnight to 1.2933 and European equities barely managed to end in positive territory – the FTSE100 up 0.2 per cent, the CaC 0.03 per cent higher, although the Dax had a better run, up 0.5 per cent.

So then the US woke up for the day ahead; a yawn, a big stretch and a barrage of economic data that was on the positive side. Consumers, that 70 per cent of the economy that just can't stop spending and taking on debt, are the most optimistic they've been since the GFC. Fair enough, they were only slightly more confident in November, with the index rising to 73.7 from 73.1 (average is about 90) ,but it is the highest since 2008. This is probably why ‘cyber-Monday' sales were so strong (up 30 per cent) and the holiday period sales, Thanksgiving, Black Friday etc combined, are looking very solid indeed even if slightly lower than last year.

On the business side, durable goods orders weren't actually as bad as feared, with total orders flat for October compared to expectations for a 0.7 per cent fall. This is good news as orders rose 9 per cent the month prior. Core orders (ex defence, ex aircraft) also rebounded, rising 1.7 per cent after a 0.4 per cent fall. Then we saw two separate surveys show US house prices rising – the S&P/Case-Shiller suggesting a 0.2 per cent rise in September, while the FHFA reckons prices rose 1.1 per cent in the third quarter.

How do you think the market reacted to all of that? By selling off. Okay, that's a little deceptive as stocks initially rose and at the high the S&P was up about 0.5 per cent. The offer only really came on from 0600 AEDT our time and it was steep. As I write the index is off 0.4 per cent (1400), the Dow is down 72 points (12,894) while the Nasdaq is flat (2976). Fiscal cliff concerns are being cited but I haven't seen anything as yet that was new in that regard and that came out as the market sold. Commodities too were weaker – with crude down 0.6 per cent ($87.2), while gold lost almost $8 to be at $1742, and copper is flat (-0.08 per cent).

Other than that, the Australian dollar is off smalls to 1.0446, same with the British pound at 1.0617 while the yen is at 82.15. US Treasuries were equally as boring, with yields down 3bps or so on the 10-year to 1.65 per cent, the 5-year at 0.66 per cent and the 2-year at 0.27 per cent. Australian futures for their part were up 4 ticks a piece – the 3s at 97.31 and the 10s at 96.83.

Today, the SPI suggests stocks will fall about 0.3 per cent while the data kicks off with construction work done at 1130 AEDT. Recall that this is an important feed into GDP, especially given concerns about the mining boom ending. While it is a very volatile series, any weakness in this series and capex tomorrow will probably be sufficient for a trigger-happy RBA to cut. Data tonight then includes German CPI, US new home sales and the Beige Book.

Have a great day…